Filing a life insurance claim is a quick and simple process, as long as you have the right information on hand.
When someone passes away, it’s a time to grieve. However, there are a few orders of business you’ll need to take care of, like filing a death claim.
We’ll help walk you through the process below, from gathering documents to checking for lost policies and filing for Social Security death benefits.
In this article:
- How to file a death claim
- How claims are paid out
- When to expect the payout
- What to do if your claim is denied
How to File a Life Insurance Death Claim
Many families are overwhelmed when the time comes to file a death claim, but the steps for filing a claim are actually simple.
1. Contact the insurance company
The first step to filing a death claim for life insurance is informing the life insurance company of the death and obtaining the proper forms from them to file the claim.
You should try to get in touch with the agent the deceased worked with or any agent who works for the company directly.
Once contacted, the agents can expedite the process and give you the personal service you need in order to make the process as simple as possible.
2. Gather the right documents
Being prepared will expedite this process even further and make it much smoother for you.
In order to start the claims process, you’ll need to present some documentation to ensure against fraud:
- Death certificate
- Life insurance policy document
The insurance company will need a certified copy of the policyholder’s death certificate. This will prove the claim is legitimate and help to prevent any fraud.
You want to make sure you send a copy of this document, and not the original, just to be safe and have the original on hand if needed.
Your funeral home can make copies for you, or you can request them directly from the State.
The policy document contains information like:
- the length of the term
- the death benefit amount
- monthly premiums
- additional details about the policyholder.
The insurance company needs this document to cross-reference with their own records, to make sure you are making the claim on the right policy.
If you cannot find the policy document, contact the insurance company to let them know the deceased had a policy with them.
While this may bring more complications in the process of filing a death claim, you will still be able to do so.
3. Submit the paperwork
In addition to the documents above, you will need to submit the claim form, also called a request for benefits.
These policy forms are very straightforward.
All you have to do is fill out the information about the policyholder which includes details like the cause of death and the policy number.
Then, you’ll fill out a bit of information about yourself as the beneficiary and send the claim form with the policy document and death certificate back to the insurance provider.
They take everything from there.
4. Choose your preferred payout method
Most life insurance policies are paid out in a one-time lump sum payment, but you may have other options.
If you have a preference regarding the payout, you’ll need to let the insurance company know when you submit your claim.
We’ll talk more about payment options below.
How Life Insurance Death Benefits are Paid Out
Once the claims process is complete, there are a few ways you can receive the death benefit.
The two most popular include:
The full death benefit will be given to you tax-free to use as you need.
Not everyone is comfortable having such a large amount of money to manage at once because it can be overwhelming.
For this reason, installment payments can be set up, paying you incrementally throughout your life. You can choose a length of time between 5 and 40 years.
Many people prefer this type of payment because it spreads out the money over a longer amount of time and provides a steady income replacement.
Just note that with installments, interest accrued on the money is taxable.
When to Expect the Life Insurance Death Benefit Payout
The first thing the life insurance company will do is perform a few preliminary checks to make sure you are the beneficiary assigned to the policy so they don’t pay the wrong person.
They also want to make sure the policy is still active and payments were up to date. You might also have to deal with the contestability period.
When the policyholder passes in the first two years, some causes of death might warrant only a percentage of the policy paying out.
This process can take anywhere from a few weeks up to a few months.
If anything was found to be false on the application or the death is deemed contestable, the company will not pay the death benefit of the policy.
If the process of investigation for contestability lasts longer than two years, the death benefit of the policy is automatically paid out to the beneficiary.
When this occurs, you can expect the check within 2 weeks of the 2-year mark.
Suicide and Homicide
Some policies have a suicide clause which states if the death was a suicide, the death benefit will not be paid out.
This investigation has a 2-year window, as does an investigation into homicide.
Spouses are named as life insurance beneficiaries more often than not, but spouses are also typically the first suspects in murder cases.
As such, the insurance company must wait until the beneficiaries have been legally cleared of any wrongdoing and are no longer suspects before they can pay out the death benefit.
Assuming there was nothing to contest, the insurer will pay out the benefit anywhere between a few days and a few months.
Despite what you may think, insurance companies want to pay out as quickly as possible because if they don’t, they are charged interest on the unpaid death benefits.
However, they also want to make sure there is a reasonable expectation for them to payout.
What to Do If Your Claim Is Denied
If the life insurance company discovers a lie in the application, there is a death by suicide or murder, or the policyholder failed to make payments, a claim may be denied.
Otherwise, there should be no issue receiving a policy’s death benefit.
Regardless of the reason for denial, here are a few steps you can take to get answers:
- Find out why: The life insurance company should provide you with an explanation of why the claim was denied. If the denial was due to an error, you may be able to fix the situation.
- Reach out to the state: A call to the attorney general or state department of insurance can give you further insight into the situation.
- Seek legal help: If you believe the life insurance company’s denial is unjust, an attorney may be able to help.
Frequently Asked Questions
For further information on filing a claim, take a look at the questions and answers below:
How long do you have to file a death claim?
There is no limitation on filing a life insurance death claim.
In effect, the insurance company has to pay, regardless of how long ago the deceased person has passed, as long as you can prove the claim with the above information.
In fact, even if the life insurance company goes out of business, all proceeds for unpaid benefits go into receivership and remain available.
The only exception is if you are denied a claim, in which case you have a statute of limitations of two years to make your case.
What documents can help you track down a policy?
If you’re wondering about the details of your loved one’s life insurance policy and want to do some research on your own before using external resources, take a look in the places below:
- Contacts: Check personal papers and address books for listings of insurance agents, estate planners, financial advisors, or lawyers.
- Safety deposit box: Check them for insurance papers or other related policy papers.
- Tax returns: You can review income tax returns for any distributions of life insurance policies.
- Mail: Check the mail for at least one year following their passing for any notices relating to coverage.
What services can help you find additional policies?
Often times, people have life insurance policies from multiple insurers.
Because life insurance isn’t discussed often, it may be difficult to know if this is the case with your deceased relative.
Here a few resources to help:
- State treasurer & national unclaimed property searches: To verify if your deceased relative had additional coverage, start searching with the State Treasurer and National unclaimed property searches. These resources are meant to help people in your exact situation.
- Lost policy finders: Lost policy finders offered by life insurance companies are one option, but using them can be a long and tedious process.
- State insurance departments: We suggest you start with state insurance department locators and only use lost policy finders as a last resort, unless you know for certain your loved one has an unpaid policy with a company.
- Former and current employers and organizations: Check with employers to see if they may have had a policy through work, as well as fraternal or professional organizations. Bank statements and canceled checks might show premium payments or policy loan payments, too.
- Third-party services: There are also private services that can help if you want to avoid the headache of tracking down a policy altogether, for a fee.
- Other insurance agents: Check with their homeowners or car insurance agent to see if they were sold a package.
If you have given all of these methods a try and are still coming up short, or you simply want to make the process easier on yourself, contact the MIB and use their policy locator service.
How does the MIB policy locator work?
The MIB policy locator provides search results for life insurance applications, but it doesn’t indicate whether the life insurance was issued or if a policy was in force when the individual passed.
If application activity is identified, the MIB will mail a report within 21 business days providing:
- The name of the company
- The date the application was submitted
- Any contact information you need to follow up with the company
The report can be ordered by an Executor or Administrator for a descendant’s estate, a surviving spouse, or the closest living relative of the descendant.
From here, you can contact the insurance company to begin the claims process.
Does social security help with death benefits?
If you have social security, you can receive a social security death benefit of $255.
You will need to fill out form SSA – 8 in order to apply for the lump-sum death benefit.
You can also visit a local Social Security office to expedite this process.
In many cases, a funeral home will report the death to the government, but you can also report the death and apply for the benefit yourself if you are the beneficiary